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internationalconstructionSEPTEMBER 2014 Vol 53 No 7

A KHL Group publication www.khl.com

P34

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High riseICON 09 2014 Front Cover.indd 1 02/09/2014 09:24:09

Full page.indd 1 01/09/2014 12:22:33

I t would be easy to think of the construction equipment industry as a conservative business. After all, machines today dont look radically different to many of their ancestors from decades ago. But a flick through the pages of this months magazine would tell you something different.

Look at the wheeled loader sector for example. Of course you can still buy simple machines with basic controls, and these sell well in many parts of the world where price is a big issue and it is difficult to justify lots of optional extras and expensive technology.

However, look at the new machines that are coming onto the market in Europe, Japan and North America. These feature some radical and innovative new designs that can make huge savings in fuel consumption.

For larger machines there is the Caterpillar XE system which places a hydrostatic drive alongside a traditional mechanical drive for huge fuel savings as well as smoother control. Further down the weight categories, both Liebherr and Hitachi are now offering machines with fully hydrostatic transmissions, which can cut fuel consumption by the order of -20% or better.

And it does not end there. In this months equipment section you can read about Komatsus intelligent machine control excavators, which are now commercially available following a launch at last years Bauma exhibition. These use tried and trusted GPS machine control systems along with a new generation of software and components such as stroke-sensing cylinders, to produce arguably the most accurate and efficient excavator ever.

And it is not just the major international players that are pushing the boundaries. Back in the wheeled loader sector, many of Chinas leading players are now offering machines powered by liquefied natural gas (LNG). This not only makes for a huge reduction in running costs, but the fuel also comes without a lot of the emission and pollution headaches associated with diesel. Some of the same arguments have prompted manufacturers to offer propane-fuelled generators, as you can read in this months portable power feature.

The question with all these new technologies, and others such as hybrids, is where is the payback? Departing from design norms or bringing in new technology is bound to cost more than sticking with convention, so equipment buyers are going to want to know what the advantages are and at what point they offset the higher purchase costs.

This is something I think the industry could communicate better to customers. In fact I think it is something the industry will have to communicate better as more technology comes into play and the choices become more bewildering.

Chris SleightEditor

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COMMENT

3september 2014 internationalconstruction

The paper in this magazine originates from timber that is sourced from sustainable forests, managed to strict environmental, social, and economic standards. The manufacturing mill has both FSC & PEFC certification,

and also ISO9001 and ISO14001 accreditation.

hnologies, and others such as parting from design norms or o cost more than sticking with oing to want to know what the ffset the higher purchase costs.try could communicate better

mething the industry will have ology comes into play and the

r that strict hetion,

ICON 09 2014 Comment CS.indd 3 02/09/2014 09:24:45

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Full page.indd 1 01/09/2014 12:23:32

INSIDE

Editor Chris Sleight BEng (Hons)e-mail: [email protected] tel: +44 (0)1892 786205Deputy Editor Helen Wrighte-mail: [email protected] tel: +44 (0)1892 786209Editorial Director Paul Marsden BSc Editorial Team Lindsey Anderson, Alex Dahm, Lindsay Gale, Sandy Guthrie, Laura Hatton, Fausto Oliveira, Cristin Peters, Murray Pollok, D.Ann Shiffler, John Skelly, Anna Sun, Euan YoudaleAdvertisement Manager Alister Williamse-mail: [email protected] tel: +1 312 860 6775Corporate Sales David Stowee-mail: [email protected] tel: +44 (0)1892 786217Production & Circulation Director Saara RootesProduction Manager Ross Dicksone-mail: [email protected] tel: +44 (0)1892 786245Design Manager Jeff GilbertDesigner Gary BrinklowDesign Assistant Grace PullingerProduction Assistant Louise Kingsnorthe-mail: [email protected] tel: +44 (0)1892 786246Financial Controller Paul BakerFinancial Assistant Alison Filtness, Gillian MartinCredit Control Josephine Day e-mail: [email protected] tel: +44 (0)1892 786250Office Manager Clare Grante-mail: [email protected] tel: +44 (0)1892 786201Business Development Director Peter WatkinsonBPA Filing Manager Hayley GentCirculation AdministrationShelley Penningtone-mail: [email protected] tel: +44 (0)1892 786238Publisher James King

International Construction, incorporating Construction Industry International and World Construction, is available free of charge on request to anyone who falls within the controlled circulation criteria. Official publication date is the 15th ofeach issue month.

It is available to anyone who does not meet the criteria at an annual subscription rate of UK185, US$295, 225. Single copies: UK15, US$24, 18.

SEPTEMBER 2014 Vol.53 No.7

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NEWS 6Construction managers, project engineers and project directors are in demand in the Middle East, as major new projects come on stream in Qatar, SaudiArabia and the UAE. Meanwhile an agreement has been reached on the US$ 1.6 billion Panama Canal expansion project dispute.

BUSINESS 10Aecom has made a US$ 4 billion offer for URS and has also snapped up Hunt Construction Group. Elsewhere in the sector, Arcadis has won the latest round of a bidding war to acquire UK engineering company Hyder Consulting.

KHL.COM 13Go to the Videozone to see Michael Kneeland, CEO of the worlds biggest rental company, United Rentals, interviewed at the recent International Rental Exhibition (IRE).

ECONOMIC OUTLOOK 15The construction outlook for Europe is brightening, but there is a contrast between stronger markets in the north and the weakness still present in southern countries.

REGIONAL REPORT 19The European construction market should return to growth this year after six years of recession. However, it will be a slow and uneven journey back to health.

WHEELED LOADERS 25Different engine regulations in developed and emerging markets mean wheeled loaders now vary a lot from country to country. However, the drive to increase fuel efficiency is common around the world and technology is changing as a result.

HIGH-RISE 34CONSTRUCTION As the worlds 100th super-tall building tops out, suppliers to the high-rise construction sector are raising their game to ensure their technology keeps up with ambition.

PORTABLE POWER 43Generators and compressors are evolving into streamlined, efficient, quiet machines, which contractors can simple switch on and forget about.

EQUIPMENT 51In-depth interviews with the CEOs of Wacker Neuson and Pilosio, plus new product news from Komatsu, among others.

New techniques and projects in the high-

rise construciton sector feature

on p.34

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internationalconstructionSEPTEMBER 2014 Vol 53 No 7


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ICON 09 2014 Contents CS.indd 5 02/09/2014 09:25:46

internationalconstruction september 2104 6

WORLD NEWSWORLD NEWS

LAOS The Asian Development Bank (ADB) has approved funding of US$ 217 million for a 290 MW hydropower project in Laos which will be built under a public-private partnership (PPP) arrangement. The bulk of the electricity generated by Nam Ngiep 1 will be delivered to neighbouring Thailand.

CHINA The 2015 BICES exhibition will be held from 22 25 September at the New Beijing International Exhibition Center (NBIEC), which is on the northern outskirts of the Chinese capital, near its main airport. It will be the 13th edition of the show. The NBIEC offers eight indoor halls with a total area of 106,000 m2. There are also two outdoor exhibition areas with 50,000 m2 each for a grand total of 206,000 m2.

SOUTH AFRICA The Bauma ConExpo Africa exhibition will move to a three year cycle after the next event, from September 15 18, 2015. The inaugural event was held in September 2013, but the organisers said the decision to hold the third show in 2018 came following consultation with local and international industry representatives, which recommended the three-year cycle for African markets.

EUROPE Construction output in the EU was -0.5% lower in June than a year previously, according to the European Commissions statistical service, Eurostat. It said building construction was down -0.2% and civil engineering by -2.7%. The largest falls were in Romania (-13.1%), Portugal (-10.3%), Slovakia (-5.0%) and the Netherlands (-3.5%), while the highest increases were in Slovenia (+28.7%), Hungary (+9.8%), Poland (+8.0%) and Spain (+6.8%).

MOLDOVA The European Bank for Reconstruction and Development (EBRD) has facilitated fi nancing totalling 670 million (US$ 890 million) to improve Moldovas road network. Some 830 km of the countrys main road network is receiving support in a joint partnership venture from the EBRD, the EUs Neighbourhood Investment Facility (NIF) and the European Investment Bank to enable the work, which will offer a signifi cant boost to its economy.

HIGHLIGHTS MIDDLE EAST

Projects drive Gulf jobs surgeConstruction managers, project engineers and

project directors are in demand in the Middle East,

as major new schemes come on stream in Qatar,

Saudi Arabia and the UAE.

T he number of vacancies for senior construction professionals in the Gulf region is surging according to international professional services consultancy Procorre. Th e company said events such as the Qatar World Cup and UAE Expo 2020 were driving demand for construction project engineers, construction managers and project directors.

Th e company, which reported on vacancies for individuals to work on a contractor basis (i.e. excluding permanent posts), said senior construction positions currently account for 27% of the total number of white collar roles marketed to UK individuals in the UAE, 82% in Qatar and 54% in Saudi Arabia.

Lisa Mangan, relationship manager at Procorre said, Th ere is a massive need for contractors to oversee the construction work beginning in Qatar. Building has started on the 12 stadiums needed for the 2022 World Cup and individuals, such as architects and engineers are needed to implement the planned extension to its road system, expansion of its power and power supplies and the construction of a brand new international airport.

Meanwhile in the UAE, the company added that research by Deloitte revealed that the value of construction projects has bounced back sharply from its trough after the fi nancial crisis, with US$ 12 billion of stalled schemes now having restarted.

US

Bechtel COO

US contractor Bechtel has named Brendan Bechtel president and chief operating offi cer (COO), with a seat on the Board. As the son of chairman Riley Bechtel, he is the fi fth generation of the Bechtel family to become president of the 116-year old company and will report to CEO Bill Dudley.

Mr Dudley said, Brendan has proven himself as an extraordinary leader, earning the respect of colleagues and customers while working in many diverse sectors of the company.

Brendan Bechtel most recently served as president of the companys Oil, Gas & Chemicals division, a role he took on in February when Mr Dudley was named CEO of the company and Riley Bechtel moved to the chairmans position.

Bechtel executive vice president Jack Futcher succeeds Brendan Bechtel as president of the Oil, Gas, & Chemicals business.

Bechtel is the largest contractor in the US. It was ranked no. 7 in the world in iCs ranking of the 200 largest global players.

EGYPT

Suez expansion announcedTh e Egyptian government has announced plans for a new Suez Canal waterway to increase capacity of the link between the Mediterranean and the Red Sea. Th e scheme calls for a new 45 mile (72 km) channel to be built, allowing two-way traffi c along part of the route.

At present the Suez Canal is only wide enough for ships to travel in one direction, with a number of passing places allowing two-way traffi c. Th e new channel would run alongside the existing channel, allowing permanent two-way operation along a section of the canals 120 mile (193 km) total length.

Th e cost of the project is put at EG 60 billion (US$ 8.4 billion) and is expected to be funded by a combination of a government

budgetary allocations and new government debt.

Th e government has said it will not seek foreign investment for the project and was also looking at ways of setting up a listed company for the scheme that Egyptian citizens could invest in.

Th e increase in the canals capacity is partly in reaction to the expansion of the Panama Canal and proposed new Atlantic to Pacifi c freight routes in Nicaragua and Guatemala.Th ese new routes could threaten traffi c levels for the Suez Canal for ships travelling between Asia and the North American east coast.

Th e 145 year-old Suez Canal earns some US$ 5 billion per year for Egypt in toll revenues. More than 17,000 vessels use the route each year.

ICON 09 2014 News NEW CS.indd 6 02/09/2014 09:27:00


WORLD NEWSWORLD NEWS

2014Bauma ChinaNovember 25 - 28, 2014Shanghai, Chinawww.bauma-china.com

bC IndiaDecember 15 - 18, 2014Delhi, Indiawww.bcindia.com

2015World of ConcreteFebruary 3 - 6, 2015(Seminars: February 2 - 6)Las Vegas, USwww.worldofconcrete.com

World of AsphaltMarch 17 - 19, 2015Baltimore, USwww.worldofasphalt.com

IntermatApril 20 - 25, 2015Paris, Francewww.intermat.fr

PlantworxJune 2 - 4, 2015Bruntingthorpe, UKwww.plantworx.co.uk

Bauma ConExpo AfricaSeptember 15 - 18, 2015Johannesburg, South Africawww.bcafrica.com

BICESSeptember 22 - 25, 2015Beijing, Chinawww.e-bices.org

ConExpo Latin AmericaOctober 21-24, 2015Santiago, Chilewww.conexpolatinamerica.com

Excon 2015December 2 - 6, 2015Bangalore, Indiawww.excon.in

2016BaumaApril 11 17, 2016Munich Trade Fair CentreMunich, Germanywww.bauma.de

EXHIBITION DIARYINDIA Samsung C&T has won the US$ 678 million contract from developer Reliance Industries Limited (RIL) for the construction of the Dhirubhai Ambani International Convention and Exhibition Centre (DAICEC) in Mumbai, India.

DAICEC will be a mixed use development located within the Bandra Kurla Complex (BKC), a commercial zone in the suburbs of Mumbai. Covering 75,000 m2 of land with 788,340 m2 of useable floor space, DAICEC will house a convention and exhibition centre, auditorium, cultural plaza, serviced apartments and an office block.

Construction is expected to be completed by 2017.

BRAZIL

Norberto OdebrechtNorberto Odebrecht, the founder of the construction company that bears his name has died at the age of 93. Construtora Norberto Odebrecht is the worlds 30th largest contractor and the biggest in Latin America.

Born in 1920, Mr Odebrecht founded his construction company in Salvador, in Brazils Bahia state in 1944. Early work included several projects linked to the citys port and shipyards. By 1973 the company had a national presence, and started to internationalise towards the end of that decade. Today the company has a presence in 23 countries and employs some 200,000 people.

Mr Odebrecht handed day-to-day running of the business to his son Emlio in 1991, but remained as chairman. He stepped down from the business all together in 1998.

Th is saw Emlio Odebrecht, take over as chairman of Odebrecht, a position he holds to this day. Marcello Odebrecht, a grandson of Norberto Odebrecht was named president and CEO of the group in 2008.

INDIA

PPPs for railIndian Minister of Railways Sadananda Gowda has said the country will look to private investment to build the nations high-speed rail network.

Speaking in the Indian Parliament, Mr Gowda said, It is our target that the bulk of our future projects will be fi nanced through the PPP [public private partnership] mode, including the high-speed rail which requires huge investment.

According to Mr Gowda, operating Indias railway network consumed 94% of the INR 139,558 crore (US$ 23.6 billion) it took as revenues last year. He said this meant Indian Railways, Hardly has adequate resources for its development works.

He added that Indian Railways would be seeking both domestic and foreign investors to fi nance development and that he was seeking cabinet approval to allow foreign direct investment (FDI) in the sector.

Th e governments plans for Indias high-speed rail network involve building the Diamond Quadrilateral, mirroring the 5,850 km Golden Quadrilateral road building project of the 1990s and 2000s that linked Delhi, Mumbai, Chennai and Kolkata.

It has identifi ed nine individual projects within this master plan and says it will start with the 525 km Mumbai to Ahmedabad section in Western India, which has been the subject of several studies.

NICARAGUA

Canal routeTh e Nicaraguan government and concessionaire Hong Kong Nicaragua Canal Development Investment Co. (HKND) have released details of the route for the proposed Atlantic-Pacifi c canal across the country. Conceived as a rival to the Panama Canal, the scheme was announced in June last year following a controversial vote in Congress.

Th e canal will start at the port of Brito on the Pacifi c coast, and pass through Lake Nicaragua before following close to the Tula and Punta Gorda rivers to enter the Caribbean Sea at the port of Bluefi elds Bay.

Th e total length of the route will be 278 km, 105 km of which will be in Lake Nicaragua. Th e excavated channel will vary between 230 m and 520 m wide and will be 30 m deep.

Th e construction budget has not been fi nalised, but is put at some US$ 40 billion. It will be Chinese concessionaire HKNDs responsibility to raise these funds, and it will have the right to operate the canal for 50 years.

Construction is due to start at the end of this year and take fi ve years to complete.

Th ere are six sub-projects within the overall scheme the construction of the channel itself, two deep water ports, a free-trade area and an airport in the city of Rivas and associated tourist development projects.


WORLD NEWS

8

US A new 11.7 mile (18.8 km) metro line has been opened in Washington D.C., US. Built by a consortium led by Bechtel, Phase I of the Dulles Corridor Metrorail Project (the Silver Line), was one of the largest and most complex urban rail projects in the US.

The US$ 1.6 billion project was awarded to a consortium comprising Bechtel Infrastructure and Washington Group International in 2007 on a design & build basis. This sum was incorporated into the total project price, which at the time was put at US$ 2.4 billion US$ 2.7 billion.

Among the construction challenges on the project were constructing 6 miles (9.75 km) of elevated track, while a tunnel was also constructed under one of the citys busiest shopping districts.

internationalconstruction september 2014

PANAMA

Agreement reached on canal disputeClient and contractor set out co-fi nancing plans

following Januarys US$ 1.6 billion dispute on

additional costs.

A n agreement has been reached between contracting consortium Grupo Unidos por el Canal, (GUPC) and the Panama Canal Authority (ACP) which the two parties say will allow the completion of the canal expansion project.

GUPC, which comprises Sacyr, Impregilo, Jan De Nul and CUSA Urban Construction, said the variation agreement outlined a plan to co-fi nance the scheme, which fell into fi nancial diffi culty at the start of this year.

Th e dispute between GUPC and ACP related to additional costs of some US$ 1.6 billion on the project linked to ground conditions. Th e agreement follows a memorandum of understanding to resolve the dispute, signed by the two parties in March.

Th e agreement provides for the completion of the project by 31 December 2015, with a number of intermediate steps, such as the delivery of the lock gates eight out of 16 have already been delivered to Panama by February 2015.

Th e agreement establishes a co-fi nancing agreement between ACP and GUPC for an additional US$ 100 million each, and the contribution by GUPC of another US$ 400 million resulting from the conversion of a performance bond from project insurer Zurich into additional fi nancing.

At the same time, the various claims by GUPC regarding unexpected costs incurred during the project will be settled through an international arbitration before the Court of Miami, US, which on 21 July this year initiated the discussion on a US$ 180 million tranche.

ACP added that construction of the third set of locks was 73% complete.

GERMANY

Bilfi nger head resigns Roland Koch has resigned as chairman of the German contractor Bilfi ngers Executive Board following a profi t downgrade for 2014. Herbert Bodner, a former chair of the Executive Board and currently a member of Bilfi ngers Supervisory Board will take Mr Kochs place on an interim basis until the end of May next year.

Mr Kochs resignation came as the company announced a reduced earnings forecast for the year due to falling profi ts in its Power business segment, with a recently discovered loss on a project in South Africa being one of the contributing factors.

Mr Koch said in a statement, Predictability on the capital market is an important commodity for a continuingly successful company like Bilfi nger. As a result of two profi t warnings in quick succession, for which I as chairman of the Executive Board take responsibility, this trust has been shaken.

Bilfi nger was ranked no. 34 in iCs Top 200 ranking of the worlds largest construction companies and no. 11 in sister magazine Construction Europes CE-100 league table of Europes biggest contractors. Bilfi nger is the second largest contractor headquartered in Germany after Hochtief.

ASIA

Growth forecastDeveloping Asia remains on track for +6.2% GDP growth this year according to the Asian Development Banks (ADBs) latest economic report. Th e forecast is in line with the Banks previous estimates for the regions 45 countries, which were released in April.

Developing Asia as a region continues to perform well, said ADB deputy chief economist Juzhong Zhuang. Th e pace of the growth moderation in the Peoples Republic of China is in line with our expectations while the stage is set for India to pursue reform that could unlock its growth potential.

INDIA

Exhibition on trackDecembers bC India construction equipment exhibition in Delhi, India is expected to take up 120,000 m2 of exhibition space according. Th is will make it about the same size as the last bC India.

Th e show will be held for the third time from December15 18 this year at the India Expo Centre in Greater Noida/Delhi. It will be its fi rst time in Delhi, having previously been held in Mumbai in 2013 and 2011. Th e inaugural show took up 88,000 m2, and grew to 120,000 m2 in 2013 when it welcomed 28,000 visitors.

BRAZIL

Votorantim fi gurehead diesFormer chairman of Brazilian cement producer Votorantim, Dr Antnio Ermrio de Moraes has died from heart failure. He was 86.

Raul Calfat, chairman of Votorantim Participaes (VPAR), said in a statement, Th e history of Votorantim is directly related to the personal dedication and hard work of Dr Antnio.

Votorantim is Brazils largest cement producer and is active in other parts of Latin America. Votorantim Group also has interests in the metals, paper and agribusiness sectors. Th e company was founded in 1919 by Jos Ermrio de Moraes, Dr Antnio Moraes father.

Dr Moraes joined Votorantim in 1949. His tenure as chairman in the 1980s is associated with the companys internationalisation. He left the group in 2001 when he was diagnosed with Alzheimers Disease.

Dr Moraes was also politically active. Among the issues he was associated with were the advancement of democracy, improvement of health services and job creation.


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Full page.indd 1 01/09/2014 12:23:56

BUSINESS HIGHLIGHTS US

Aecom goes buyingConsultant makes US$ 4 billion offer for URS and

also snaps up Hunt Construction Group

E ngineering design company Aecom has agreed to acquire fellow US consultant engineer URS Corporation for US$ 4 billion in cash and shares. Aecom will also assume URSs debt, taking the total transaction value to some US$ 6 billion.

Under the terms of the deal, Aecom will pay US$ 56.31 per URS share, which represents a 19% premium on the 30-day average share price leading up to the merger announcement on July 11. Th is will be made up ofUS$ 33.00 in cash and 0.734 Aecom shares. However, URS shareholders can elect to receive all cash or all shares for their existing stock. Aecom said it was aiming for an overall mix of 59% cash and 41% shares in the transaction.

In a separate deal, Aecom has acquired the US$ 1.2 billion per year construction manager Hunt Construction Group. Th e value of the deal for the privately-held company was not disclosed.

Hunt is best known as a builder of stadiums and other sports facilities. However, it is also active in the health care, aviation, commercial and tall buildings sectors.

Th e addition of both companies to Aecom will give it annual revenues in the region of US$ 20 billion, with 95,000 employees in 150 countries.

UK

Stalled mergerBalfour Beatty has rebuff ed three takeover off ers from UK rival Carillion. Although talks were initially constructive, Balfour Beattys proposed sale of its US arm, Parsons Brinckerhoff , emerged as a deal-breaker. Carillions fi nal off er valued Balfour Beatty at just over UK 2 billion (US$ 3.3 billion).

Balfour Beatty is the UKs largest contractor. It was ranked no. 9 in Construction Europes CE-100 ranking of Europes largest contractors and no. 26 in (iCs) ranking of the worlds top 200 construction companies. Carillion was no. 25 in this years CE-100 and no. 70 in the iC Top 200.

Brazil

Cement salesHolcim and Lafarge have proposed selling three integrated cement plants, two grinding stations and a ready-mixed concrete plant in Brazil to help win regulatory approval for their planned merger.

Th e proposal has been put to Conselho Administrativo de Defesa Econmica (CADE) as part of pre-merger negotiations and will now be subject to review and further discussion.

In a separate development Lafarge has agreed to sell its controlling stake in Lafarge Pakistan Cement to Bestway Cement for US$ 329 million. Lafarge Pakistan Cement is quoted on the Karachi, Lahore and Islamabad stock exchanges, and Lafarge is selling its 75.86% stake in the business.

US

Mining impactCaterpillar had revenues of US$ 14.2 billion for the second quarter of the year, a -3% decline on the same period last year. Although the companys sales of construction equipment were up +11% compared to a year ago, it was a weak quarter for the Resources Industries division, which is focussed on the mining sector. Th e companys net profi t for the quarter was up +4% on the same period last year at US$ 999 million.

VALUE OF 1: SYMBOL AU$ BRL UK CNY INR YEN MXN RUR SAR ZAR KRW CHF US$Australian Dollar AU$ 0.47 0.564 5.75 0.708 56.4 97 12.26 33.8 3.50 9.99 950 0.857 0.935Brazilian Real BRL 2.12 0.266 2.71 0.334 26.6 45.8 5.77 15.9 1.65 4.71 447 0.404 0.440British Pound UK 1.77 3.76 10.2 1.26 100.1 172 21.7 59.9 6.21 17.7 1684 1.52 1.66Chinese Yuan CNY 0.174 0.369 0.098 0.123 9.81 16.9 2.13 5.87 0.609 1.737 165 0.149 0.162Euro 1.41 3.00 0.80 8.12 79.7 137 17.3 47.7 4.95 14.10 1341 1.21 1.32Indian Rupee INR 0.018 0.038 0.010 0.102 0.013 1.7 0.217 0.598 0.0621 0.177 16.8 0.0152 0.0166Japanese Yen YEN 0.010 0.022 0.006 0.059 0.007 0.580 0.1260 0.347 0.0360 0.1027 9.8 0.0088 0.0096Mexican Peso MXN 0.082 0.173 0.046 0.469 0.058 4.60 7.93 2.75 0.286 0.815 77 0.070 0.0762Russian Ruble RUR 0.030 0.063 0.017 0.170 0.021 1.67 2.88 0.363 0.104 0.296 28.1 0.0254 0.0277Saudi Riyal SAR 0.285 0.606 0.161 1.641 0.202 16.107 27.760 3.499 9.635 2.85 271 0.245 0.267South African Rand ZAR 0.100 0.213 0.056 0.576 0.071 5.650 9.738 1.227 3.380 0.351 95 0.086 0.094South Korean Won KRW 0.0011 0.0022 0.0006 0.0061 0.0007 0.0594 0.1024 0.0129 0.0356 0.0037 0.0105 0.00090 0.0010Swiss Franc CHF 1.17 2.48 0.66 6.71 0.83 65.87 113.52 14.31 39.40 4.09 11.66 1108 1.091US Dollar US$ 1.07 2.272 0.604 6.155 0.758 60.4 104.1 13.12 36.13 3.75 10.69 1016.12 0.917 For example US$ 1 = AU$ 1.07

Exchange rates: August 2014

UK Miller Group has agreed to sell its UK 409 million (US$ 680 million) per year construction division to domestic rival Galliford Try for UK 16.6 million (US$ 27.7 million). The deal will include the businesss cash balance of UK 23 million (US$ 38.3 million), meaning Miller is effectively paying Galliford Try to take this loss-making division off its hands.

GERMANY Road building equipment manufacturer Wirtgen has bought a 70% stake in Benninghoven, a privately-owned, Germany-based maker of asphalt mixing plants. Wirtgen which also owns the Vgele, Hamm and Kleemann construction equipment brands said adding Benninghoven complimented its existing portfolio.

RUSSIA Rasperia Trading, a subsidiary of Russian businessman Oleg Deripaska conglomerate Basic Element has increased its shareholding in Strabag from 19.4% to 25% plus one share. The 123 million (US$ 164 million) deal takes Basic Elements interest in Strabag back to the level it was at in early 2009.

PORTUGAL Contractor Mota-Engil has suspended the initial public offering (IPO) of shares in its subsidiary Mota-Engil Africa due to weakening stock market conditions. The London, UK fl oatation could have netted itUK 405 million (US$ 700 million) had all the shares been subscribed at the top of the price range.


BUSINESS NEWS

10

UK

Arcadis beats Nippon Koei to get HyderArcadis has agreed to buy UK-based engineer Hyder Consulting forUK 288 million (US$ 489 million). Th e Dutch company had to increase its initial off er following a rival bid from Japans Nippon Koei. Hyders Board has recommended the increased off er to shareholders.

Th e end of July saw Arcadis off er UK 6.50 (US$ 11.00) per share for Hyder, valuing it UK 256 million

(US$ 435 million). Th is was topped just over a week later when Nippon Koei came in with a UK 6.80 (US$ 11.56) per share off er. Arcadis has now come back to the table with a UK 7.30 (US$ 12.41) per share off er, which values Hyder atUK 288 million (US$ 489 million), a more than +12% increase on its original bid, or an additional UK 32 million (US$ 54 million).

ICON 09 2014 Business News CS.indd 10 02/09/2014 09:29:20

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13

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KHL.COM

NEW

NEW

NEW

UPDATED

NEW

UPDATED


Rental outlookGo to the Videozone to see Michael Kneeland,

CEO of the worlds biggest rental company, United

Rentals, interviewed at the recent International

Rental Exhibition (IRE).

M ichael Kneeland, the chairman of US-based United Rentals was interviewed by International Rental News (IRN) editor in chief, Murray Pollok at the International Rental Exhibition (IRE). In interview on the www.khl.com Videozone, Mr Kneeland gives his views on the state of the industry from his vantage point as the head of the worlds largest construction equipment rental company,

Of the North American market, which is United Rentals sole focus, Mr Kneeland said, Weve seen a signifi cant pick up in rental penetration. We see that holding and then the volume coming back as the economy heals. [Non-residential construction] is coming back, but its coming back at a very slow pace. Th ats a healthy thing for our industry, because were not going to have to rush out and buy a load of equipment.

Another question for Mr Kneeland was whether there were any plans to expand United Rentals footprint outside of its home market. Its not a question of If?, but When? We dont know. We want to fi nd out whats available to us, but were not in any great rush. North America is still the biggest opportunity for us, he said.

Visit www.khl.com/videozone to watch the full interviews. Other news and interviews from IRE are also available on the site.

Special reportsSeveral new league tables and special reports are available from the KHLs Information Store, www.khl-infostore.com.

Th ese include the latest industry league tables from several of iCs sister magazines.

Among the new additions are the studies from International Rental News (IRN) on the worlds largest rental companies. Th ese include an extended version of the IRN100 ranking, with additional information that was not published in the magazine, as well as a fi ve-year report, containing the IRN100 listings from 2010 2014.

Th ese provide a valuable insight into the global rental industry, charting the rise and fall of individual companies as well as

analysing trends across the sector.

In a similar vein, Access, Lift & Handler (ALH) magazine has produced a compendium of fi ve-

year reports covering its Telehandler 30 study of North Americas biggest telehandler owning companies, packaged with a fi ve-year report on the Aerials 20 ranking of the regions biggest aerial platform owners.

Again, these reports provide a unique insight into these niches, with company information given alongside analysis of industry trends.

Monthly podcastEvery issue of iC is accompanied by a podcast, which can be downloaded from iTunes for free. Alternatively you can listen to it on the Podcast page of KHL.com, or click on the image below in the iPad edition of the magazine.

Each podcast sees iC editor Chris Sleight discuss key stories, including the news making the headlines at the front of the magazine to more in-depth discussions stemming from features.

Go to Podcasts under the Audio & Video tab of www.khl.com or scan the QR code to access the latest edition Th e online archive at www.khl.com now stretches back more than two years.

Ranking the worlds largest rental companies

A KHL Group Publication IRN100: 2010-2014

www.khl.com

NEW

SINTERNATIONALrentalIRN1002010-2014

G

C

R

RSpecial reportsIRN100 2010-2014

IRN100 2010-2014

42

432014

6 6 Aktio Corp 929

887 Tokyo, Japan Japan,

Thailand, Construction

566 4678 +81 3 6854 1413

Singapore, Malaysia

, equipment, tool hire,

www.aktio.co.jp/en/

and Taiwan

party/events

7 8 Loxam 805 828 Pari

s, France France, Ireland, UK,

Construction 611 4410

+33 1 58 440 400

Denmark, Germany,

equipment, tools

www.loxam.com

Spain, Belgium,

Switzerland,

Luxembourg, Moroc

co.

8 5 Coates Hire Ltd 758

987 Sydney, Australia Austral

ia, UK, Construction

240 2612 +61 2 9701 3308

Indonesia

equipment, tools

www.coateshire.com.au

9 13 Cramo 657 680 Vant

aa/Helsinki, Northern, Central &


+46 8 623 5477

Finland Eastern Europe,

equipment, tools,

www.cramo.com

Russia

modular

10 10 Ramirent 634 714 Vant

aa, Finland Fin, Sw, No, Den, Ru,


+358 20 750 200

Est, Lat, Lith, Pol,

equipment, tools

www.ramirent.com

Hun, Ukr, Cz, Slov

11 9 Nishio Rent All Co 623

723 Osaka, Japan Japan,

Malaysia, Construction

335 2593 +81 6 6251 7302

Thailand, Singapore

, equipment

www.nishio-rent.co.jp

S. Korea, Vietnam

12 12 Nikken Corp 601

683 Tokyo, Japan Japan,

US, UAE, Construction

192 1985 +81 3 5512 7311

Thailand, Spain,

equipment

www.rental.co.jp/english

Indonesia

13 14 Sarens 592 560 Wolv

ertem, 58 countries

Cranes 90 4200

+32 52 319 319

Belgium worldwide

www.sarens.com

14 11 Kanamoto Co 524

698 Sapporo, Japan Japan,

China, ASEAN, Construction

351 2231 +81 3 5408 5600

UAE, Algeria

equipment

www.kanamoto.co.jp

15 16 Kiloutou 471 460 Marc

q en France, Poland


+33 359 56 55 39

Baroeul, France

equipment, tools

www.kiloutou.fr

16 75 BlueLine Rental 450

110 EST Beverley Hills, North A

merica Construction

132 2100 +1 828 650 2311

(formerly Volvo Rents)

CA, US

equipment

www.volvorents.com

17 18 Speedy Hire 406

421 Newton-le-Willows, UK & Ire

land, Construction

264 3776 +44 0845 601 5129

UK Middle East,

equipment, tools

www.speedyservices.com

North Africa

18 21 Home Depot Rentals 356

1 357 Atlanta, Georgia, USA

, Canada, Mexico Construction

1265 +1 770 433 8211

US

equipment, tools

www.homedepot.com

19 =40 Select Plant Hire 350

EST 230 EST Dartford, UK UK

Construction

+44 (0)1322 296200

equipment, tools,

www.selectplanthire.com

tower cranes

20 20 Taiyo Kenki Rental 349

405 Shizuoka, Japan Japan


+81 542 843 111

equipment

www.taiyokenki.co.jp

21 25 H&E Equipment 348

298 Baton Rouge, USA


+1 801 908 4307

Services

Louisiana

equipment

www.he-equipment.com

22 19 AMECO 308 408 Gree

nville, SC, USA US, Canada,


+1 864 295 7800

South & Central

equipment, tools

www.ameco.com

America, South Afric

a,

Iraq, Afghanistan,

Philippines, Australi

a

23 33 Liebherr-Mietpartner 302

272 Ludwigshafen, German

y, France, Construction

129 248 +33 680 889 822

Germany Spain, Austria, UK,

equipment

www.liebherr.com

Switzerland

TURNOVER

TYPE OF

RANK ( MILLION)

AREAS OF

RENTAL NUMBER OF

14 13 COMPANY

13/14 12/13 HEAD OFFICE

OPERATION COMPANY

DEPOTS STAFF CONTACT DETAILS

Shifting currents

2014

The themes of last years

IRN100 are repeated in

this years list, with North

American rental companies

motoring ahead while

Europe and Australia remain

becalmed. Helen Wright reports.

IRN100 Notes & thanks

IRN again thanks those companies and

individuals who contributed informatio

n to

the survey. If you have comments, or wo

uld

like to be included next year, please con

tact

the editor. Tel: +44 (0)1892 786209

E-mail: [email protected]

Rankings are based on rental revenues

for

2013 (or the most recent financial year)

and

include sales of used fleet and consumab

les/

contractor supplies. Where known, sales

of

new equipment have been excluded from

the

survey. Figures denoted (Es

t) have been estimated by

IRN. As in previous years, figures denote

d (1)

are taken, with thanks, from the annual

RER-

100 survey published by US-magazine RER

(Rental Equipment Register) in May 2014.

All revenues have been converted into

using exchange rates as at 31/12/13, as fo

llows

(exchange rates used in last years surve

y are

given in brackets):

1.00 = US$ 1.318 (1.32)

=UK 0.837 (0.81)

=AU$ 1.548 (1.27)

=CA$ 1.470 (1.31)

=JPY 144.9 (114.2)

=ZAR 14.28 (11.19)

=SEK 8.85 (8.58)

=S$ 1.75 (1.61)

=NOK 8.38 (1.34)

=BRL 3.26 (2.41)

=CNY 8.36 (8.22)

=NZ$ 1.68 (1.60)

TABLE 1

Forecasters were cautio

us with their outlooks

for rental growth last year, and with

good

reason North America apart, 2012 d

id not

live up to its promise, and the same

uncertainties

that held economies back two years a

go remained

relatively unchanged at the start of 2013

.

But in the end, a picture has emerged of

a relatively

stable year, with the momentum behind

the recovery

in North America contrasting with a s

till-sluggish

Europe and a faltering Australia. And th

is came amid

modest growth from emerging count

ries, where

fledgling rental markets are still gaining

ground.

1 1 United Rentals 3331

2989 Greenwich, USA, Can

ada Construction

876 12200 +001 (203) 622-3131

Connecticut, US

equipment, tools

www.unitedrentals.com

2 2 Aggreko 1890 1954 Glas

gow, UK 100 countries

Power, temperature 202 6000

+44 141 225 5900

globally

control and

www.aggreko.com

compressor rental

3 3 Ashtead Group 1690

1395 London, UK UK, US


+44 020 7726 9700

equipment, tools

www.ashtead-group.com

4 7 Algeco Scotsman 1302

870 Baltimore, More th

an 37 countries Portable

260 5130 +1 410 931 6000

Maryland, US in Europe, North

accommodation/

www.algecoscotsman.com

America, Middle Eas

t, storage units

Brazil, Australia/NZ

and Asia

5 4 Hertz Equipment 1017

1051 Park Ridge, US, Can

ada, France, Construction

360 4315 +1 201 307 2000

Rental Corp

New Jersey, USA Spain, C

hina, equipment, tools

www.hertzequip.com

Saudi Arabia

TURNOVER

TYPE OF

RANK ( MILLION)

AREAS OF

RENTAL NUMBER OF

14 13 COMPANY

13/14 12/13 HEAD OFFICE

OPERATION COMPANY

DEPOTS STAFF CONTACT DETAILS

IRN100 Revenues

2013 2013

2013 2012 2011

2010 2009 2008

2007 2006 2005

(currency Reven

ues % change Revenues Reven

ues Revenues Revenues Reven

ues Revenues Revenues Reven

ues

adjusted) ( bil

lion) (adjusted) ( billion) ( bil

lion) ( billion) ( billion) ( bil

lion) ( billion) ( billion) ( bil

lion)

Top 5 9.56bn 9.2

3bn 14.1% 8.38bn 6.9

6bn 5.30bn 5.04bn 6.3

0bn 7.20bn 7,2bn 5,6

bn

Top 10 13.76bn 13.0

1bn 11.4% 12.35bn 11.4

4bn 8.90bn 8.07bn 10.0

0bn 10.80bn 9,8bn 8,0

bn

Top 50 27.50bn 25.

55bn 8.1% 25.43bn 24.

23bn 20.20bn 18.73bn 2

2.00bn 22.10bn 20,0bn

16,8bn

Top 100 33.98bn 31.7

0bn 8.2% 31.40bn 29.

43bn 24.90bn 23.20bn 2

7.10bn 26.90bn 24,7bn

20,4bn

Total World Market

70bn (Est)

60.00bn 55.00bn 55.00bn

60-65bn 62bn 50bn

45bn

United Rentals maintained its position at the

top of

the IRN100

ICON 09 2014 KHL page CS.indd 13 02/09/2014 09:29:54

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15

ECONOMIC OUTLOOKSlow recovery


>

Slow recoveryThe construction outlook for Europe is brightening, but there is a contrast between stronger markets

in the north and the weakness still present in southern countries. Scott Hazelton reports.

T he Euro zones economic recovery will remain gradual, with tensions in Ukraine and the Middle East adding uncertainty to an already diffi cult economic environment. Real GDP looks to be growing at only lacklustre rates this year.

Although there has been an improvement for Spain, there is weakness in Belgium and Italy. Even Germany is now showing only marginal gains, despite a strong fi rst quarter. On the plus side, Euro zone unemployment has dipped slightly and employment and real wages are rising a little.

Th e Purchasing Managers Index (PMI) for manufacturing suggests that output growth has slowed and new order growth has stabilised. IHS Global Insight expects further depreciation of the Euro, which will improve manufacturing competitiveness.

On the other hand, the services PMI has climbed, reinforcing hopes that economic growth is gaining traction. Since European economies are typically more dependent upon services than manufacturing, this is good news for construction on balance. Low infl ation suggests that the European Central Bank (ECB) can sit tight and wait for interest rate cuts and liquidity measures to take eff ect, although further easing is unlikely.

On balance Euro zone real GDP is expected to increase +1.0% in 2014, improving to +1.5% in 2015 and +1.6% in 2016 with better than expected prospects for Spain being off set by weaker prospects for Italy and France.

By contrast, the UK economy is performing well, with consumer spending and business

fi xed investment driving growth. While the manufacturing PMI confi rmed a loss of momentum, the PMI for the dominant services sector showed buoyant growth for output, incoming new business and employment.

Importantly for construction, the business investment outlook is favourable, supported by companies healthy cash positions, improved profi tability and easing credit conditions. Businesses are currently investing to improve productivity and develop new markets and products. Over time, there will be an increasing need to add capacity.

With this strength, the Bank of England is likely to raise interest rates in the coming months. Increases will be gradual, however, as the central bank gauges the impact of rising rates in an environment of high debt burdens and a strong currency. IHS Global Insights UK GDP outlook is for +3.1% growth this year, +2.8% in 2015 and +2.7% in 2016 nearly twice the Euro zone performance.

Construction growthGiven this economic outlook, the view for Western Europe construction is one of improvement, but with anaemic growth. After years of contraction, total construction spending will expand +1.5% in 2014 and off er about +2.2% growth over the following three years.

Infrastructure spending provides most of the impetus, as the need for fi scal austerity diminishes and countries need to catch up on deferred projects. Turkey, Germany and the UK lead

growth in this segment, but their growth rates are not much higher than in recent years. Th e real turnaround in infrastructure growth for the region is a return to marginal growth (or at least smaller declines) in Greece, Ireland, Portugal and Spain after the collapse seen in the crisis years.

While uninspiring in the early years of this forecast, the non-residential structures segment will go on to see the strongest growth with average annual increases of +2.3%, over the next fi ve years. Over the same period, residential construction will grow at only +1.8%.

Germany (+3.9%) off ers the best non-residential structures outlook in the near and medium terms, with most of its strength coming from the manufacturing sector, although Germany will also lead European growth in the commercial and institutional segments.

Th e UK (+3.8%) off ers the second largest growth in non-residential structures and off ers the strongest growth in Europe in the offi ce sector. A further indication of the turnaround in Europe is Ireland, with the fi fth highest growth (+3.0%), behind Sweden (+3.4%) and Turkey (+3.3%).

Turkey has become one of the more disappointing economies in Europe as political dysfunction has increased risk and decreased interest in capital expenditures, particularly from foreign investors.

Residential outlookAt +4.8%, the UK will be the leader as far as residential construction growth is concerned, followed by Turkey (+4.7%). Part of the UK growth is a price eff ect, but the country is also benefi tting from housing policy decisions and sustained economic growth that encourages residential investment. While Turkey has become less attractive as an investment economy, it still off ers Europes most attractive demographic profi les and improving personal incomes.

On the other hand, residential overhang remains in Spain, while fi scal policy and a lack of consumer confi dence is dragging on residential construction in Greece and Portugal. All three will continue to contract in the near term, and even fi ve years from now will have smaller residential construction sectors than they do today. While Ireland is improving in non-residential structures, it will take time for that to fi lter through to consumers, and it will also see further residential sector contraction.

Scandinavia will enjoy moderate growth in the +2% to +2.5% range, although Norway will be

Total construction growth forecasts

2013 2014 2015 Average 2013-2018 Average 2018-2023

World Western Europe United Kingdom France Germany Spain Italy

8%6%4%2%0%

-2%-4%-6%-8%

-10%-12%

ICON 09 2014 Economic Outlook CS.indd 15 02/09/2014 12:12:31

ECONOMIC OUTLOOK

16

Slow recovery


somewhat below the regional average. Austria, Switzerland and the Netherlands will realise total construction increases near +1.6%, while France will struggle along at just over +1% average growth.

Th e bleeding has nearly stopped in Spain, but Portugal, Greece and Italy will see signifi cant further declines in construction spending in 2014 and 2015. Residential construction will

However, the outlook for Southern Europe remains poor. While the fi nancial position of these economies is gradually improving, the necessary reforms to improve labour market competitiveness remain largely without action. Such an environment is not conducive to new investment. Europe is a more attractive market today, but it remains a decidedly mixed bag of opportunity. iC

IHS Global InsightRecognised as the most consistently accurate forecasting company in the world, IHS Global Insight has over 3,800 clients in industry, finance, and government with revenues in excess of US$ 80 million, 5,100 employees and 50 offices around the world in 30 countries. 80% of Fortune 500 companies are customers of IHS Global Insight. For more information on matters discussed in this article or Global Insights services, visit www.globalinsight.com or contact Scott Hazelton in the US on +1 781 301 9044 or at [email protected]

be the weakest sector in these latter economies as unemployment remains high and fi scal policy favours taxation over economic stimulation.

Th e region has made progress with its fi scal and fi nancial diffi culties, and the construction outlook is more positive today than a year ago. Indeed, some economies, notably Germany and the UK, have thrown off the yoke of recession. Most of northern Europe will see growth to a lesser extent.

%

Forecasts by sector for Europe

4%

3%

2%

1%

0%

-1%

-2%

-3%

2013

Non-residentialResidential

2014 2015 2016 2017

Infrastructure

E X P E R T I S E

I N N O V A T I O N

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ICON 09 2014 Economic Outlook CS.indd 16 02/09/2014 09:34:44

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Full page.indd 1 01/09/2014 12:29:53

Full page.indd 1 01/09/2014 12:30:17


REGIONAL REPORTLight at the end of the tunnel

>

Th e bad news is that no-one expects the recovery to be very spectacular. Th is has always been true for the European construction sector the boom of ten years ago only witnessed growth rates of about +3%. At the same time, red-hot emerging markets like China and India had construction sectors growing at +10% or more per year, and even other developed areas like the US grew at consistently higher rates.

Light at the end of the tunnel

The European construction market

should return to growth this

year after six years of recession.

However, it will be a slow and

uneven journey back to health.

Chris Sleight reports.

Peri has supplied formwork, scaffolding and engineering services to the construction of a satellite terminal at Munich Airport

in Germany. When complete next year the facility will increase the airports capacity

by 11 million passengers a year.

F irst the good news. It looks like the European construction sector will grow this year, after six years of falling output.It will not be a huge bounce-back by any means. Th e European Construction Industry Federation (FIEC) puts the increase at just +0.1%, which would bring construction output in the EU to just over 1,160 billion (US$ 1,550 billion).

Other organisations are more bullish. Euroconstruct, the group of European forecasting bodies predicts +1.3% growth for this year. Similarly, as Scott Hazelton of IHS Global insight writes in this months Economic Outlook, that companys forecast for Western European construction growth this year is +1.5%.

One of the problems with having so many sources to choose from is that it can be diffi cult to know where the truth lies. However, the main point is that the major forecasters see Europes construction industry coming out of recession this year.

A consortium comprising Bauer, Alfred Kunz, Baresel, Schaelerbau and

Leonhard Weiss is working on the2.6 km Falken rail tunnel on the Wuerzburg to Frankfurt line. The

tunnel will replace the 158 year-old Schwarzkopf Tunnel which is too steep and twisting for modern requirements.

ICON 09 2014 Regional Report CS.indd 19 02/09/2014 12:13:55


REGIONAL REPORT

20


Th is looks like it will be the case once again. Th e most optimistic forecasts have European construction growth hitting about +2.0% in two years time or so. Th is will be against a global average of +4% or better, with many major emerging markets expected to be up in +7% to +10% territory.

But it is always dangerous to generalise about European growth, because the region is made up of such a spread of countries with diff erent growth characteristics and drivers.

Th e broad generalisation about the region these days is that the Northern countries are performing the best, and the situation gets worse in the South.

Most would agree that the most attractive European construction market this year is the UK, thanks to a booming housing market and a number of high-profi le infrastructure projects like the Crossrail East-West rail project in London. Growth is put at +4.4% this year by Euroconstruct, with a further improvement expected next year.

Th ere are one or two other European countries where growth might be stronger this year Ireland and maybe Sweden but the UK is a much more signifi cant market. According to Euroconstruct, it is the third largest construction market in Europe, at 169 billion (US$ 225 billion) in 2013, behind

France and the regional powerhouse of Germany with its 280 billion (US$ 370 billion) annual construction output.

Elsewhere in the North, the Nordic countries are also among the better performers in Europe, with Denmark, Norway and Sweden also showing good growth, although Finland has had a few ups and downs over the last year or so.

Kjetil Tonning, FIECs vice president with responsibility for the Nordic and Baltic countries, and vice president for business development at major regional contractor Veidekke said, As I remember it, Sweden was the fi rst to recover after the fi nancial crisis. Th ey recovered surprisingly fast.

Th ere are some good projects taking place in the region. Norway, Veidekkes home country, is among the best-positioned thanks to its oil & gas wealth.

It is stable, said Mr Tonning, not much change. You know what you can expect even if you change the government. For big investments in infrastructure, we are convinced they will continue doing what the last government did.

Th e fi nancial resources are there, even though the oil fund can only spend a limited part of its revenue on that. As long as the government has a policy saying that they are going to connect all the small villages, then we will have a lot to do because it is a huge country.

Jernbaneverket, the Norwegian Rail Administration, is working on Follobanen, which is being designed to meet the increased demand for rail capacity in Oslo. It is expecting a 30% population increase by 2025, partly a result of migration to the capital for work. Jernbaneverket has highlighted potential for increased freight traffi c as well as passenger trains.

Follobanen is a 22.5 km high speed line between Oslo and Ski stations, and Jernbaneverket said it would include Norways longest tunnel so far. It said by 2025, it expected 11,000 more travellers a day, an almost +70% increase in train passengers to the Oslo Central Station at rush hour, about 5,800 fewer car trips and about 750 fewer truck journeys a day.

Preparatory work is underway, and the main construction work will be carried out between 2015 and 2021.

Infrastructure is also a driver in Sweden, fuelled by the governments National Transport Plan for 2014 to 2015, which >

One of the milestones on the London, UK Crossrail project this year was the successful launching I June of a 10,000 tonne, 120 m long bridge over the Great Western Main Line,

which connects London to the west of England and South Wales. The

bridge will be part of a new rail link to Londons Heathrow Airport.

The E6, one of Norways important road and rail projects, seen here two years ago at the start of the work.


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Full page.indd 1 01/09/2014 12:30:47


REGIONAL REPORT

22


includes the high-speed rail link from Stockholm to Linkoping, among others.

In addition, work is underway on the Stockholm metro. A 6 km commuter rail tunnel is being built beneath central Stockholm the 1.7 billion (US$ 2.3 billion) Citybanan project.

Weakness remainsIn contrast to the strength in the UK, Sweden and Norway, all of which are outside the Euro Zone, things start to look a little weaker within the more core European countries, and particularly towards the South of the region.

In mid-Europe, there are signs that construction growth in Germany is slowing, even though Europes biggest market led the way out of recession a few years ago and had one of the regions bolder national stimulus plans in the crisis years.

Th ings look even worse in France, where Euroconstruct says a construction recession has returned, following some encouraging signs in 2011. Th e organisation says it will be 2016 before the French construction sector grows again.

Frances economic stagnation provoked a major schism in the government in August, with prime minister Manuel Valls fi ring almost his entire cabinet for disagreeing with president Franois Hollandes austerity policies.

Th e theme of austerity in Europe, championed by German chancellor Angela Merkel, is one that has also drawn criticism from the construction industry. FIEC vice president Jacques Huilllard said, Th ere can be no growth without investment. Th e policy of austerity which has been in favour for the last few years has done enormous damage both to the real economy in general and to the construction sector in particular.

It is certainly true that austerity measures have bitten into public construction. FIECs fi gures show that infrastructure construction was down -3.7% in Europe last year, while the value of construction in the public non-residential segment fell -5.5%. It was only a more buoyant housing sector that limited the decline in overall construction output last year to -2.3%.

Undoubtedly the countries that have suff ered the most since the crisis years have been the Southern peripheral economies such as Greece, Italy, Spain and Portugal.

Spain was once considered one of the Big 5 construction markets along with France, Germany, Italy and the UK. However, six years of double digit declines have seen construction output fall to 65 billion (US$ 86 billion) last year, according to Euroconstruct, compared to a pre-crisis high of almost 220 billion (US$ 290 billion) the countrys construction market is worth

just 30% of what it was seven years ago.Having said that, Spain seems to have reached the bottom,

and is showing signs of recovery, and that is stimulating business. For example, Valero Serentill, regional sales manager for equipment auction company Ritchie Bros said, When you open a newspaper or read the news online, you see signs of recovery in Spain. Th e banks report fewer bad loans, GDP is expected to grow slightly, the tourism industry is still expanding and government stimulus-packages are rolled out to boost the industry.

He said another reason for hope was the changes being made to business models in construction companies.

He added, Before you can look to the future, you have to look closer at the present. An important and real change is that people are getting a grip on the reality of the market. Step by step you see big and small construction businesses all over Spain adapting their business model to the new needs and opportunities of the market.

Figures from Euroconstruct forecast a return to moderate growth for the Spanish construction market in 2015, with a similar improvement expected for Italy and Portugal.

But forecasting is of course a dangerous business, and the circumstances that can change constructions outlook are sometimes unexpected and can come around more frequently than the annual cycle of industry updates.

Th e European Commissions statistical service, Eurostat provides monthly data, and since the second quarter of the year, there has been some suggestion that European construction growth could be reversing, or even stagnating. Worsening relations with Russia, insurgency in the Middle East and other global concerns are all having an impact on Europes weak economic growth.

As construction output tends to go up and down with the general economic cycle, there is a concern that even though these factors are well-removed from the industry itself, they could be enough to delay the recovery. iC

Stockholms Citibanan project.

Veidekke and FIECs Kjetil Tonning says of Norway, You know what you can expect even if you change the government.


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Full page.indd 1 01/09/2014 12:35:05


Economy drive

Different engine regulations in developed

and emerging markets mean wheeled

loaders now vary a lot from country to

country. However, the drive to increase

fuel effi ciency is common around the

world. Chris Sleight reports.

M ore and more of the wheeled loaders being sold in Europe, Japan and North America are now fi tted with a new generation of low emission engines. Stage IV (Europe) and Tier 4 (US, Canada and Japan) requirements started to come into force last year.

It takes time after the implementation date for these new engine machines to reach the market. Manufacturers are allowed various fl exibility provisions to use up stocks of older engines as well as sell other old Tier machines once the new laws have come in. But as time goes on these machines work their way through the system, and more and more Tier 4/Stage IV loaders fi nd their way to construction sites.

Many other parts of the world also have emissions regulations that apply to wheeled loaders and other off -highway equipment for construction, mining and agriculture. At present the most stringent of these is the equivalent to the older Stage IIIA/Tier 3 laws. And of course there are many parts of the world where there are no emissions regulations at all.

Th e main reason lesser regulated countries have stopped at Tier 3 levels is that above this fuel quality becomes a critical issue. Th e various aftertreatment systems used to achieve Stage IIIB/Tier 4 Interim and Stage IV/Tier 4 Final require ultra low sulphur diesel about 10 or 15 parts per million(ppm) of sulphur. Any higher than this and exhaust after treatment systems like diesel particulate fi lters (DPFs) and selective catalytic reduction systems (SCR) get clogged with soot, and the engine will overheat.

So until ultra low sulphur diesel is widely available in emerging markets, these countries will likely stay at Tier 3 emissions levels at best, even though many governments have a desire to make regulations more stringent.

Parallel developmentTh is divergence of developed and emerging markets has had an impact on the models manufacturers produce. Wheeled loader makers that want to be global now have to produce at least two ranges a Tier 4 model for developed markets and a Tier 3 model for lesser regulated countries. Some would also argue the need for a Tier 0 machine, as in many countries a Tier 3 model would be over-sophisticated (uncompetitively priced) and

WHEELED LOADERS Economy drive

Volvos Stage IV-compliant L250H is said to offer 18% better fuel economy than its predecessor thanks to the companys Optishift drivetrain technology.

Caterpillars M-series medium sized wheeled loaders are available with its XE technology, a continuously variable transmission delivering -25% lower fuel consumption than machines with traditional drivelines.

Komatsus WA320-7 features

the companys parallel Z-bar

front end, which gives it good

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>

ICON 09 2014 Wheeled loaders CS.indd 25 02/09/2014 09:38:28


WHEELED LOADERS

26

Economy drive

>

perhaps unreliable as well due to fuel quality issues and the tight tolerances inherrent in Tier 3 engines.

What is interesting is that manufacturers are taking the opportunity to design loaders with features specifi cally designed for emerging markets, rather than just taking a previous years European or US model with a lower Tier engine.

One example of this comes from the fact that many emerging markets are in tropical or equatorial regions, so there is often a need for more serious engine cooling, air fi ltering and air conditioning.

Meanwhile in developed markets, all the technology that has been added to engines to reduce emissions has of course pushed up purchase prices. In order to help make this more palatable to their customers, loader manufacturers have been looking at ways of improving fuel effi ciency and cut other running costs on new models.

For example, Volvos new L250H wheeled loader, a Tier 4 Final machine, is claimed to off er 18% better fuel economy than predecessor models thanks to the companys Optishift transmission system.

Th is covers several technologies, one of which is called Reverse By Braking (RBB). In short cycles, operators tend to switch rapidly between forward and reverse movements, and this means the loader tends to be slowed down by the torque converter, rather than the brakes. Th is is less effi cient than using the brakes and also strains the transmission. RBB gets round this by automatically applying the service brake, even though the operator might be using the machine in the same way with the forward/reverse lever.

In a similar class to the 35 tonne operating weight L250H are Caterpillars new 980M and 982M wheeled loaders, which weigh in at 34 and 36 tonnes respectively. Again, fuel effi ciency improvements on these Tier 4 Final machines are a key feature,

F lix, Spain-based Trans-Crispi has bought a new Doosan DL350-3 wheeled loader for arduous day-to-day work. The family business is active in concrete supply, excavation, container rental, waste management & transportation and public works. However, one of its main activities at the moment is the extraction, transportation and disposal of waste sludge from a chemical plant near its headquarters.

Company director Antonio Ortega said, We previously had another brand of wheeled loader, but we needed one with a higher bucket capacity for the sludge removal task, to fully optimise our work. We also needed a tougher machine because this work is quite harsh, with 12 hour days on average. The new Doosan DL350-3 is an excellent model in terms of bucket capacity, static tipping load capacity and standard equipment, which is very complete and technologically advanced.

It will be working at the landfi ll and the concrete plant, loading materials into containers and trucks or transporting them at our facilities. It will also be used to perform tasks for our clients, such as the sludge removal job.

We are very pleased with the machines performance so far. Its power, load capacity and speed are well balanced. We are also happy with its safety levels, as this model includes all the necessary equipment required under European regulations.

The machine is equipped with a Stage IIIB-compliant Scania engine delivering 202 kW. The transmission and axle are from ZF.

New workhorseDoosan loader chosen for arduous work

Following a successful trial Southwick, UK-based aggregates and cement company Dudman Group has bough seven Liugong wheeled loaders. The largest is the 888III, which weighs in at 30 tonnes and features a 250 kW Cummins QSM11 engine.

A hydrostatic transmission has helped reduce fuel consumption on Hitachis ZW140-5 by -20%

compared to the predecessor model.

JCB previewed its first Stage IV loaders at Hillhead. It says the use of an MTU engine on the range-topping 457 has contributed to a 16% overall fuel economy saving.

ICON 09 2014 Wheeled loaders CS.indd 26 02/09/2014 09:38:57

Full page.indd 1 01/09/2014 12:35:33

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